SECTIONS 30400-30406 - California Statutes

GOVERNMENT CODE

SECTION 30400-30406

30400. (a) It is in the interest of the state and all public debt
issuers within the state to enable the County of Orange to finance an
acceptable plan of adjustment in order to improve the credit
standing of California public debt issuers and to preserve and
protect the health, safety, and welfare of the residents of the
county and the state. To that end, successfully resolving the county
bankruptcy and restoring the financial position of county government
is a matter of statewide interest and concern.
(b) As a further guarantee that the county will be able to prepare
and obtain confirmation of an acceptable plan of adjustment, it is
appropriate to create a back-up mechanism for appointment of a state
trustee.
(c) It is in the further interest of the state to facilitate and
expedite the confirmation of an acceptable plan of adjustment by
vesting in a state trustee the authority and discretion to present
and enforce certain claims held by cities, public districts, or other
governmental agencies against the county.

30400.5. For purposes of this chapter, the following words have the
following meanings:
(a) "Confirmation of the plan" means confirmation of the plan of
adjustment pursuant to Section 943 of Title 11 of the United States
Code.
(b) "County" means the County of Orange.
(c) "Investment pools case" means Case No. SA-94-22273-JR in the
United States Bankruptcy Court for the Central District of
California.
(d) "Pending case" means Case No. SA-94-22272-JR in the United
States Bankruptcy Court for the Central District of California.
(e) "Plan of adjustment" means a plan of adjustment as that term
is used in Sections 941 and 942 of Title 11 of the United States
Code, that contains provisions incorporating the material terms of
the county consensus recovery plan, as specified in the Joint
Agreement of the County of Orange, the Official Investment Pool
Participants' Committee and Each Option A Pool Participant for
Resolution of All Claims Against the County of Orange, September 6,
1995. A plan of adjustment may contain other terms and provisions
that are not inconsistent with the joint agreement.
(f) "Specified county officers" means the treasurer-tax collector,
auditor, chief executive officer, and assessor.
(g) "Trustee" means the person appointed by the Governor pursuant
to Section 30401.

30401. (a) If the county has not filed a plan of adjustment with
the bankruptcy court by January 1, 1996, the Governor may appoint an
individual to serve as trustee of the county. The appointment may
occur at any time after January 1, 1996, until confirmation of the
plan. Notwithstanding the timely filing of a plan of adjustment, the
Governor shall appoint a trustee if the Governor determines that, as
of May 1, 1996, or any date thereafter, the parties specified below
have failed to reach substantial agreement on the terms of the plan
of adjustment and the timely confirmation of the plan appears
unlikely. Before reaching the foregoing determination, the Governor
or his or her designee shall first consult with (1) the specified
county officers and the board of supervisors, (2) the Official
Committee of Unsecured Creditors of the County of Orange appointed in
the pending case, and (3) the Official Committee of Investment Pools
Participants appointed in the investment pools case. The trustee is
a public official of the state and shall serve at the pleasure of,
and is responsible to, the Governor.
(b) The trustee shall have recognized expertise in management and
public finance.
(c) The trustee may institute a financial plan for the county if
the county fails to present a balanced budget.
(d) In implementing a financial plan for the county, the trustee
may exercise all necessary and appropriate powers of the county board
of supervisors, subject to the same legal limitations that apply to
the board of supervisors.
(e) The trustee shall exercise the powers granted pursuant to this
chapter for an emergency period that ends upon the adoption, after
the appointment of the trustee, of two consecutive balanced final
budgets and achievement of two positive audited fund balances, as
determined by the Governor or his or her designee.

30402. (a) If a trustee is appointed pursuant to this chapter, all
powers granted to the county board of supervisors, including, but not
limited to, those powers granted by Section 29530.5, shall be
withdrawn and delegated to the trustee. However, the trustee may
provide for the continued exercise of all or specified powers by the
board of supervisors. Further, the trustee shall oversee the pending
case and may exercise the county's right to file a plan of
adjustment.
(b) If at any time, in the discretion of the trustee, after
consultation with (1) the specified county officers and the board of
supervisors, (2) the Official Committee of Unsecured Creditors of the
County of Orange appointed in the pending case, and (3) the Official
Committee of Investment Pool Participants appointed in the
investment pools case, the trustee determines that the continued
exercise of specified powers by the board of supervisors is not
conducive to the most effective action for resolving the pending
case, the trustee shall reassume those powers.
(c) Upon termination of the emergency period specified in
subdivision (g) of Section 30401 all powers otherwise granted to the
board of supervisors shall revert to the board of supervisors.

30403. (a) The trustee may employ any staff necessary to assist him
or her.
(b) To facilitate the appointment of the trustee and the
employment of any necessary staff, for the purposes of this section,
the trustee is exempt from the requirements of Article 6 (commencing
with Section 999) of Chapter 6 of Division 4 of the Military and
Veterans Code and Part 2 (commencing with Section 10100) of Division
2 of the Public Contract Code.
(c) Notwithstanding any other provision of law, the trustee may
appoint employees of the state to assist the trustee for up to the
duration of the trusteeship. The salary and benefits of the employees
shall be established by the trustee and paid by the county. During
the time of the appointment, the employees shall be deemed to be
employees of the county but shall remain in the same retirement
system under the same plan as if the employee had remained an
employee of the state. Upon the expiration or termination of the
appointment, the employee shall have the right to return to his or
her former position, or to a position at substantially the same level
as that position, with the state. The time served in the appointment
shall be counted for all purposes as if the employee had served that
time in his or her former position with the state.

30404. (a) The trustee may issue or execute and deliver for and in
the name and on behalf of the county, any of the following forms of
debt or other obligations:
(1) Notes, tax anticipation warrants, or other evidences of
indebtedness pursuant to Article 7 (commencing with Section 53820),
Article 7.5 (commencing with Section 53840), or Article 7.6
(commencing with Section 53850) of Chapter 4 of Part 1 of Division 2
of Title 5.
(2) Grant anticipation notes pursuant to Article 7.7 (commencing
with Section 53859) of Chapter 4 of Part 1 of Division 2 of Title 5.
(3) Revenue bonds pursuant to Chapter 6 (commencing with Section
54300) of Part 1 of Division 2 of Title 5.
(4) Refunding bonds pursuant to Article 9 (commencing with Section
53550) or Article 10 (commencing with Section 53570) of Chapter 3 of
Part 1 of Division 2 of Title 5.
(5) Certificates of participation or lease revenue bonds to
finance the lease or lease-purchase of property and for this purpose
may lease property, for and in the name and on behalf of the County
of Orange, to or from any other public or private entity.
(b) If the trustee issues notes, tax anticipation warrants, or any
other evidence of indebtedness or other obligation pursuant to
subdivision (a), the trustee may provide, in the terms of the
issuance, for the pledge of any taxes, income, revenue, cash
receipts, rents, or other moneys of the county, including moneys
deposited in inactive or term deposit accounts, or rights to receive
the same, to the extent that the taxes, income, revenue, cash
receipts, rents, or other moneys could have been used to pay
principal or interest on the issuance. The priority and perfection of
the pledge shall be governed by Chapter 5.5 (commencing with Section
5450) of Division 6 of Title 1.

30405. (a) If a trustee is appointed pursuant to this chapter, the
trustee may assume and exercise, solely to the extent necessary to
prevent denial of confirmation of the plan of adjustment and
consistent with the interests of the state to promote the timely
confirmation of the plan, the following specified powers of those
cities, public districts, or other governmental agencies holding
claims against the county based upon investment losses incurred or
derived from the failure of the Orange County Investment Pools:
(1) The authority to vote to accept or reject the plan of
adjustment filed by the county in the pending case, or to change or
withdraw such an acceptance or rejection.
(2) The authority to subordinate or otherwise restructure the
claims specified in this subdivision against the county.
(3) The authority to take actions in the pending case that are
consistent with the timely confirmation of the plan.
(4) Other powers that are necessary and proper to execute the
authority conferred by this section.
(b) In exercising the authority conferred by subdivision (a), the
trustee shall be serving the public purpose of a speedy and just
resolution to the pending case. To that end, the trustee shall not
act in a manner inconsistent with the fair treatment of any parties
subject to this section.

30406. The provisions of this chapter are severable. If any
provision of this chapter or its application is held invalid, that
invalidity shall not affect other provisions or applications that can
be given effect without the invalid provision or application.